Need to tighten cyber-security to prevent fraud

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By 2017-10-13

By M Rishar M Saleem

An independent financial analyst based in Colombo called for tighter regulations and more security checks to prevent financial frauds over the internet. He emphasized that tech-savvy business and non-business communities in the 21st century indulge in many financial and non-financial transactions online, without knowing the risk they face of losing their wealth to a fraudulent imposter.

Many existing loopholes in the rules need to be mended to prevent threats to cyber-security; if not, prevailing systems will only result in fraud and malpractice in the finance-related sector. All governments need to sit with experts and carve more secure mechanisms, he said.

The financial sector was disturbed early this week with the reports of the online hacking of a Taiwanese bank. The Far Eastern International Bank of Taiwan reported a hacking on 6 October 2017. Reports indicated that its computer system had been implanted with malware, which affected the bank's PCs and servers.

Two suspects were apprehended and remanded. According to media reports, the submissions made to court by the CID highlighted several crimes such as money laundering, cybercrimes, fraud and illegal hacking.
He further emphasized that "our laws governing are good as any other country's laws but lack a proper mechanism of implementation, which in return, lets offenders go scot-free." "These are as old as its birth," was his observation. He said these crimes happen in a more organized manner and in rare instances, one or two are exposed, while others remain free at large.

Picking from now-notorious Raj Rajaratnam's case, he pointed out that the "FBI nabbed him to trace his connections with LTTE and terrorism. To establish evidence they listened to his phone conversations secretly and tapped all his electronic communication devices used to converse with his associates. This resulted in exposing his 'insider trade' involvements which was a by-product, stemming from the main suspicion."

He further highlighted there is a loophole in law enforcement. Speaking on the law-enforcing authorities limitations he said that "listening to others' telephone conversations surreptitiously is prohibited by law unless suspected of terrorism; if not, the evidence will not be accepted by a court of law," he further stressed.

Hackers send a fake transactional email to an employee and fake bank transactions to break through the standard security system. In a recent similar instance, the Bangladesh Central Bank scam, Deutsche Bank officials flagged mistakes in the account name, and were able to unravel the fraud, he recalled.

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